Employees are often required to sign a Covenant Not to Compete. This places a restriction on the employee during employment, and for a stated period after employment, from competing with the employer.
The Maryland Courts will enforce these types of Covenants provided they are “reasonable” in nature.
In determining reasonableness, the Court will look at the description of the industry that the employee will be barred from competing, the length of time covered, and the territory where the Covenant applies. The more limited each aspect of the Covenant is, the more likely the Covenant will be enforced.
Covenants Not to Compete also appear in contracts between businesses, where one company wants to work with another company without allowing that company to become a competitor when the contract ends.